Metals & Mining: Beyond the deep

Jun 28, 2013

Miners across Latin America are scaling back capex and looking further afield for funding as they keep an eye on the longer term amid falling prices for metals

By Karen
Schwartz

Toronto-based Vena Resources is one of a number of like-minded
companies exploring locations across Peru to set up mines. The
firm is hopeful that someday soon, it can turn one such site
into a profitable operation.

But as markets turn against the industry, its goal has just
become a lot harder.

Miners across the region are suddenly grappling with falling
metals prices, having already been stung by increasing
competition and rising salaries. Concerns over an economic
downturn in China – long the driver of demand for the
industry – are quashing hopes that metals prices will
recover any time soon.

"It has become very, very difficult for exploration
companies to survive in this marketplace," says Juan Vegarra, a
Peruvian who is chairman and CEO of the Canadian firm.

The bear turn on miners is clear from a cursory look at the
market. Stock prices of large miners have fallen...